This fact will allow the company to now grow its operations in the target locations while some competitive companies would have to concentrate on generating more income to cover the financial liabilities, rather than to make more capital expenditure to grow the brand.

The company has chosen to reduce the number of its current assets by decreasing the number of inventories which does not have a negative impact on the company financial position of development potential. At the same time, as the company has acquired more assets as buildings and land for future development and operations, the amount of total company assets has increased from the U.S.$2.937 billions in the year of 2005 up to U.S.$3.010 billions in the year of 2006. As the real estate market is subject to fluctuations currently and the commercial property prices are vulnerable due to economic instability, decrease in property values can lead to the total decrease of the company assets values, which reveals necessity to consider lease options instead of owning options.

Legal Structure, Management Overview

One of the company founders, Mr. Jack Smith is still on the company Board of Directors monitoring and advising due to his rich expertise as to the further company development strategy. The board of directors comprises of 13 professionals, listed below. Out of the current board of directors, Blaine Sweatt III is among one of the biggest company shareholders with approximately 330,000 shares.

As can be inferred from the composition of the company board of directors, the skills within the top management of the corporation are very well diversified, with specialists from different relevant areas. Also, all the managers are seniors and thus possess very in depth knowledge into the industry, can bring in their expertise and advise, are both marketing, investment, hospitality business professionals thus ensuring company strategic growth and development.

Out of the total company shares, approximately 7% are held by the insiders, within this figure 5% out of the total shares are held by the owners, and thus 2% are held by middle level management and the like. Approximately 82% of the shares are held by strong institutional investors / owners, the number of the involved institutions reaches 367. This represents strong interest of risk averse investors to the company, its stable income producing abilities, growth opportunities.

Company Location and Facilities

The company's primary operations are in the U.S.A. And Canada, thus the company does not operate either in Europe, Asia or in any emerging promising European markets. The company has flexible criteria for the size of the premises for their restaurants, with location playing a more important role and the company then adjusting the premises for their needs of good quality facilities. The company either owns or leases on long-term lease agreements premises for its operations, and has a number of logistics space where it stores good quality food necessary for the operations of the company business. The company does not manufacture products which allows it to save costs on manufacturing facilities. As the main property necessary to open one unit within the company is the restaurant premises, the company will be quite flexible to win over the new markets and create management teams necessary to be there.

Plans for Financing the Business

Currently, according to historic company development plans, the company needs to acquire approximately 35 more premises around the U.S.A. And Canada to continue the company development plan. This will require up to UA$170 million dollars as some properties will be located in prime clusters in the biggest cities and will require heavy initial investment. Net income of the company annually is above U.S.$330 million which is sufficient to cover this expansion program even out of the cash. In light of growing interest rates it would not be financially wise to attract another loan to finance the expansion plan with debt. Furthermore, as the company is targeting to buy out shares as the financial management believes this is the optimal time to reduce the number of owners now and that the shares are under priced, the company should not issue more stock to finance its' growth program.

As the suggestion of this subject business plan, the company should target and try to enter some new emerging markets in the Europe and Eastern Europe which are becoming the Clondike for new business opportunities there due to their maturing economies, but very low starting base of any services/products offered and thus big development potential for good quality retailers / service producers. Such entry can offer much higher returns on capital employed compared to still attractive, but lower than in new markets returns possible to be achieved.

The company projected 5-year growth is graphed below.

Thus, the company is likely to achieve up to U.S.$8.7 bln up to 2011 and if the company maintains its profitability at 8% (after servicing long-term debt, taxes), the annual profit of U.S. $695 ml should be sufficient for outlay and expansion for other districts and locations.

Organization

Organizational Structure

Currently, the company has the following organization Structure:

The board of directors select the strategic priorities of the company development, such as brand strengthening / disassembly, regions to be entered, amount of capital to be invested into each brand and district and the like. Then, the strategic decisions are broken down into quantitative and qualitative goals to be fulfilled for the management teams of each brand, which are at more operational management level, but who still have a strong influence on the decision of the board of directors as they report on the inside of each of the brands operations.

Other Key Employees

If the company wishes to enter a new market it selects a country or a region representative who then together with local professionals selects the best format/brand of the company suitable for the local needs, and then appoints managers to these local brand operations. For this purpose the company has developed a strong HR management team who ensure leadership growth programs to be implemented at all the levels of the company, including perfection of middle management levels, and growing operating specialists into future managers knowing the business from the inside.

Market Analysis

Summary

Though the economy in the core markets of the company prevalence is slowing down and the growing oil prices motivate consumers to shift their consumption patterns, the total profits achieved by the restaurant industry in the fiscal year of 2006 and expectations of the major industry player for the year of 2007 are optimistic. Professionals expect to achieve approximately U.S.$537 billion total sales in 2007 which is approximately 5% growth compared to the 2006 revenues. Due to formed life style and high opportunity cost of time for working people, latest studies reveal that a typical American family spends as high as 48% of their total food budget. This has lead to 16 years of high real growth for the restaurant industry in the U.S.A.

Furthermore, it is believed that 12.8 million people more will be working for the restaurant industry in the coming 10 years. But as the competition within the industry is one of the strongest, only those capable of adjusting to shifting preference, shall be able to secure long-term growth. Recent studies present that the biggest trend currently is for smaller portions, bite-sized deserts of organic foods, good quality brown bread, grass-fed meat, fresh herbs, untypical mushrooms, Mediterranean and Pan Asian cousins is among the most popular, grilled products, and locally produced goods are extremely popular among the fine, family and casual dining. Up to 65% of population from 25 to 34 years old are ready to serve themselves which can create a new trend and decrease the costs of restaurants operations. Another positive for the industry trend is the decreasing number of consumers eating either in their cars or on the go.

The operators of full service restaurants are targeting to expand the options of take home menus to grow their sales, and are also targeting to increase their efficiency. Quick service restaurants are targeting to promote healthier choices menus, delivery and catering, gift cards ideas.

According to some analysts, the industry of casual dining is expected to be increasing by 5% to 7% each year in the coming from 10 to 15 years, which will positively influence the development of the competitive companies operating in it, the likes of the subject corporation.

The economic situation in the U.S.A. is likely to be reserved from expansion and the country is likely to experience the economic slow down, which together with worsening mortgages market is likely to put pressure on daily consumption of the residents of necessity goods and on consumption of such goods of more leisure perceived goods such as dining out. This restriction of the future home industry development must put pressure on the management of the company to improve competitive position of the existing operating objects by addressing current health awareness, to withdraw from…[continue]